The Plain Packaging Dispute – is it in Violation of Tobacco Companies’ IP?

The Plain Packaging Dispute – is it in Violation of Tobacco Companies’ IP?

Over the last ten or twenty years, we have seen a significant and sustained crackdown on the way that tobacco companies are able to package and market their products. Since Canada became the first country to enforce graphic picture warnings on cigarette and tobacco packaging in 2001, many countries have followed suit in a bid to discourage or put off smokers altogether. None of them, however, could have possibly foreseen the complex intellectual property debate it has provoked.

Since 2001, the rules and regulations regarding tobacco packaging have evolved considerably — the pictures on the packets have become increasingly gruesome, while the UK has enforced shutters in supermarkets to hide tobacco products from the sight of customers — and one of the strictest countries in this regard is Australia. In 2011 it introduced a Tobacco Plain Packaging Act, which, as described by World Trademark Review, requires “all cigarettes, cigars, rolling tobacco and pipe tobacco to be sold in identical packets that are of a drab olive colour, with 75% of the front of the pack and 90% of the back covered by graphic, government-issued health warnings.” On top of this, the brand name on each packet must be printed in a standardised font.

Although the reasons behind this Act are obvious, many global tobacco companies that sell their products in Australia believe that it is in violation of their intellectual property (IP) rights. Shortly after the Tobacco Plain Packaging Act was first introduced, several companies filed a formal complaint to the World Trade Organisation (WTO), claiming the act blocked their rights to IP under the country’s Trade-Related Aspects of IP Rights (TRIPS) agreement and created “unnecessary barriers to trade”.

On the one hand you can understand the frustration of the tobacco companies. With no freedom to include their own unique logo, design or slogan on their packaging, it is suddenly much harder for them to carve their own unique space in the marketplace and stand out from the competition. As a result, they are destined to see a significant fall in both sales and public brand recognition.

On the other hand, however, there is the more rational and sensible argument, which is that maintaining the health of the public is far more important than maintaining the profits of the tobacco companies. Of course, those who have bought the same brand of cigarettes for years may not be intimidated by the anonymity of plain packaging, but it is sure to have a profound effect in deterring the younger generations from taking up the habit.

Unsurprisingly, it seems as though WTO is in agreement. Although no official verdict has been made, the decision to rule in favour of Australia­­­ has already been leaked and serves as a bitter blow to the tobacco companies that formed the complaint. Although those companies are likely to appeal the decision once it is officially announced in July, the decision will almost certainly give other countries the confidence boost they needed to go ahead and enforce their own plain packaging regulations.

Ultimately, this story highlights the sheer importance of judging any and every IP-based story on a case-by-case basis. There is no go-to rulebook and no tried-and-tested method that allows judges and experts to easily make decisions on cases — especially when it comes to public health.